Questionable Ethics: Lootboxes, Skin Markets and Gambling

Is paying to win really that bad? Yes. Yes it is.

There has been a rising level of concern this year over the increasing amount of luck and randomisation elements gradually being injected into games as microtransactions become the norm across a wider range of titles. As developers and publishers invest larger and larger amounts of money, both during the development and marketing portions of release, the willingness of players to embrace microtransactions has essentially opened the floodgates. Gone are the straight expansions and even DLC of yore as the only tack-on elements of a game; now even single player experiences can involve real-cash randomisation to get better gear or experience boosts.

Microtransactions aren’t new – they’ve been around for years now, introduced back in the early days of digital console marketplaces (the infamous Horse Armour anyone?) where most of the content was purely cosmetic. Skins, costume packs, themes, avatars – much of this stuff could be unlocked via normal play in many cases but for a couple of bucks you could skip the queue and have it instantly. This gradually evolved over time into pre-order bonuses, which began to involve items that did enhance or speed up play – better weapons or armour early, for example. But in most cases, it was harmless, albeit a little corrupting to many gaming purists.

It wasn’t until the last few years, particularly with the incursion of free to play titles, that heavily rely on microtransactions as a primary business model, that things started getting very murky. Originally microtransactions work like any other traditional goods/service model – you see an item, you pay for it, you receive that item. There is no ambiguity, and no meta-game involved in this simple transaction. Even as player-accessible marketplaces began to arrive, allowing players in some titles to create content to sell, the dynamic of the transaction stayed mostly the same.

The concept of a randomly generated loot system existed before Overwatch hit the scene, but it was the manner of how Blizzard’s hit shooter packaged the items that began to cause concern. The loot box is a wholly randomised property, and while it isn’t the only way to get items in Overwatch, it’s easily the fastest. When a box is purchased, even Blizzard is not sure what it contains – when it is opened, an algorithm randomly chooses a bunch of various loot, duplicates and all, which can range from a set of legendary skins to a pile of useless voice lines and dupes. Duplicate items immediately convert to coins, which you can use to buy whatever you want.

On the surface, these boxes seem relatively harmless. They do not impact the game itself, as all the items are cosmetic, and they can be earned with in-game play time. But borrowing deeper into the science behind loot boxes becomes much more fraught – unlike a simple coin-for-gear system (you earn coins, you buy gear) the randomisation aspect of a loot box triggers that rat part of your brain that thrives on luck, chance and the chase. There’s a reason games develop an entire game screen and setup for opening them, complete with musical and visual cues – this is exactly how pokies work.

Pokies entrance their users with the opportunity of a jackpot, complete with breadcrumbs of progression. A little win here and there every half dozen spins continues that heightened sense of the chase and tricks you into thinking you’re close to a victory. Catchy music, flashy, congratulatory graphics and effects flood dopamine into your brain and keep you happy while you’re in that state. This is how gambling is so addictive, and games have used this same science for decades to keep you playing. But once the dynamic changes – in which games exploit this system to strip money out of you, and not just time – a line starts to be crossed, particularly when children are exposed to it.

But James, I’m sure many of you are saying, Overwatch’s loot boxes aren’t gambling! You aren’t betting money to win more money!

But this isn’t the case. By paying Blizzard for 100 loot boxes, you are gambling on the fact that those loot boxes are going to give you what you want. If you’re gunning for a legendary Hanzo skin and it takes 74 loot boxes to get there, or hell, 150 loot boxes, you’ve effectively gambled tens of dollars to reach that point. A loot box might as well be a pair of dice that you click on – except that unlike a casino, Blizzard doesn’t publish what the odds are that you’ll get something good in any of them. Hell, it even gives you freebies to get you hooked.

It’s even worse in Heroes of The Storm, where Blizzard replaced an equitable system of earning gold that you spent on items, or simply allowing direct purchase, to offering various tiers of loot boxes. They even introduced elements (like sprays) that are completely redundant in a MOBA to clutter up the jackpot so it’s more difficult to earn useful items and instead requires a higher spend on boxes or coins to get them. HOTS is free to play, which explains the wider expansion of the system, but the manner in which it’s so easy to gamble is disturbing to say the least.

It’s inside this meta-game that developers are much cleverer in hiding their tactics. Pokies are much less pretentious at taking your money – they are what they are and are (somewhat) regulated as such. Developers dress up this pachinko pantomime in a song and dance that explicitly hides its intent, and clouds the fact that you will always get something, anything, out of a box, whereas in a casino your play might come up naught. Newer games, like Shadow of War and Destiny 2, do “publish their odds” in that they guarantee a certain “level” of quality in a box/pack or dictate the contents vaguely. But this is still a gamble – even though you get at least “one epic”, the other four things could be complete garbage or a pot of gold.

The most disturbing part of these systems is how easily they legitimise known and restricted gambling practises and tactics for children and teenagers. In the same way there is an outcry over airing live gambling odds during televised sport, which also legitimises gambling in the eyes of children by linking something exciting and fun to the idea of gaining a benefit, so do loot boxes in games. It gets even worse, however, when you let people sell these same items in marketplaces.

Steam’s marketplace allows almost any item that is earned or built in one of its supported games to be sold on its service, with it taking a small cut of every sale. This, along with its traditional revenue stream from game sales, has made its parent company Valve extraordinarily profitable – not unlike state governments that take cuts from casinos and lotteries – and thus much less intense about limiting or restricting the sale of items procured from randomised drops, or purchased loot boxes. Websites like CSGO Lotto have taken this to the next level, linking directly into Steam and encouraging players to put down real money to gamble on skins for the game. Gamers have also “invested” vast amounts in items to trade or gamble them when their value rises.

Steam’s marketplace allows almost any item that is earned or built in one of its supported games to be sold on its service, with it taking a small cut of every sale.

The uncovering of a 2015 patient by Activision that details the way microtransactions can be intricately gamed – such as by lowering game difficulty when a new weapon is bought or heightening it to make it seem more alluring – is a cold reality of how deep the rabbit hole can go when it comes to loot hounding. Gamers are already conditioned to enjoy getting loot – it makes up a stunning amount of playtime in most modern titles – so these methods and the others that haven’t been patented or invented yet could make the loot box practically primitive in its design and yield.

In countries like Japan and China, there is legislation that makes it illegal for games to seek payment for items of varying value according to chance. Last year, Senator Nick Xenophon introduced legislation to curb the increasing use of these tactics in games but it did not make it past that stage. If anything, at the very least the ability to use systems that operate in this fashion – that rely on real money for chance rewards – should be blocked to users under 18. There should be clear rules and requirements on their use and warnings that gambling is contained.

Hell – under our classifications systems, even in-game gambling simulations (without real-world cash) must be declared. But as technology grows past what we commonly perceive as “gambling” – sports, pokies, parlour games – there needs to be more vigilance and genuine care put into what is being offered to us. Developers and publishers should think carefully before they keep expanding and widening this tactic before they find themselves legislated to do just that.

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